Recent Financial Statement Data for Harmony Health Foods (HHF)Inc A)347
B)1

question 20

Multiple Choice

Recent financial statement data for Harmony Health Foods (HHF) Inc.is shown below.HHF's times interest earned ratio is (rounded to two decimal places) : $$\begin{array} { | l | r | l | r | } \hline \text { Current liabilities } & \$ 180 & \text { Income before interest and taxes } & \$ 125 \\\hline 10 \% \text { Bonds, long-term } & \underline{360} & \text { Interest expense } & \underline{36} \\\hline \text { Total liabilities } & \underline{540} & \text { Income betore tax } & 89 \\\hline \text { Stockholders' equity } & & \text { Income tax } & 27 \\\hline \text { Common stock } & 200 & \text { Net income } & \underline{\$ 62} \\\hline \text { Retained earnings } & 280 & & \\\hline \text { Total stockholders' equity } & \underline{480} & & \\\hline \text { Total liabilities and equity } & \$ 1,020 & & \\\hline\end{array}$$

• A)3.47.
• B)1.72.
• C)2.47.

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Definitions:

Asset-Based Loan

An asset-based loan is a type of lending, often secured by a company's assets, where the loan amount is based on a percentage of the value of those assets.

Operating Lease

A contract that allows for the use of an asset but does not convey ownership rights of the asset to the lessee.

Risk Of Obsolescence

The risk that a product or service becomes outdated and undesired due to new technologies or changes in consumer preferences.

Lessor

The party in a lease agreement who owns the property and grants another party, the lessee, the right to use it for a specific period in exchange for payment.